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BTC-e bitcoin trading platform down. $4 billion in money laundering

Shadowy bitcoin trading site BTC-e is down, possibly seized by authorities. The operator, Alexander Vinnik, was indicted in California, arrested in Greece, and is sure to be extradited. Law enforcement believes BTC-e laundered proceeds from the MtGox theft, other bitcoin thefts, and ransomware payments as well. $4 billion was laundered, authorities say. So, it was just flat-out organized crime.

There may still be a few diehard libertarians who feverishly think bitcoin is unhackable, because encryption. They are wrong. The dark web is not secure, neither is Tor. Encryption is just part of it. Dark web admins make mistakes, and sometimes those mistakes get them sent to prison. Blockchains are public and can be analyzed. Sooner or later the money has to exit into the real world. Law enforcement will be waiting.

Anyone who thinks governments will allow billions in money-laundering to continue to occur in a financial area they have no governance over is delusional.

Within the Bitcoin community, it has been common knowledge that drug dealers could use BTC-E to turn their Bitcoin proceeds into dollars.

Soon after news of Mr. Vinnik’s arrest became public, WizSec, a Japanese computer security firm that has been tracking the Mt. Gox theft, announced that it had traced the stolen funds to Mr. Vinnik and had provided its findings to law enforcement authorities.